Trade War – U.S. vs China

    China could the The United States in China be on the brink of a trade war may be the president Donald Trump follows through on his a campaign promise to tax their imports so what is it about the us-china trade the relationship that Trump isn’t a fan of well he doesn’t think it’s fair to let’s start with the numbers of trade in goods and services between the two is huge six hundred and fifty-nine point four billion dollars in total to be precise 161 billion dollars worth of goods from America was sent to China that year while Chinese goods imported to the US stood at four hundred and ninety-seven point eight billion dollars so what does that means it means the US had a trade deficit totaling three hundred and thirty-six point two billion dollars in 2015 six point six percent more than the previous year which brings us back to President Trump and why he is so annoyed with China because we can’t continue to allow China to rape our country and that’s what they’re doing that’s why while on the campaign trail the the president promised to impose hugely tariffs on the Chinese this could be anywhere between ten percent and forty five percent so what exactly does that mean well let’s use this cup of tea as an example now say I’m a Chinese tea maker and right now it costs me about one US dollar to import this Chinese tea into the United States well if Donald Trump introduces a 45 percent tariff on all goods from China this one cup of tea will now cost one dollar and forty-five cents to get into the United States and you’re probably wondering who’s going to have to pay that price well it’s going to be me the consumer but I’m probably going to ask myself why would I want to pay one dollar and forty-five cents for a cup of tea from China when I could potentially get a cup of tea from India for less than a dollar and that could badly hurt Chinese companies and their products it would be the first volley in a us-china trade war Beijing could impose retaliatory tariffs on certain industries and that in turn would hurt American companies America’s top export to China is airplanes so increasing tariffs on Boeing for example would hurt but it’s not just tariffs state-run carriers like Air China could simply decide to stop ordering planes from Boeing and instead buy from rivals like European manufacturer Airbus that leaves the big question who would win in the us-china trade war the Chinese say they’re ready for any potential protectionist actions and that their the economy would remain strong over the last couple of years the Chinese have shifted its economy away from a manufacturing one to a consumption-based one trade made up just 28.6% in 2016 down from thirty-six point three percent in 2015 China has also been trading more and more with countries with a growing consumer base like India and finally the two could spark a trade war over China’s currency the yuan president Trump has been critical of the yuan saying throughout his campaign that Beijing is unfairly devaluing it making Chinese exports more attractive even after winning the election he tweeted de China asked us if it was ok to devalue their currency making it hard for our companies to compete it’s unclear a president Trump will actually impose a 45 percent tariff on goods imported from China but one thing is for certain it won’t be hurting just the Chinese and American economies have the potential to lead the entire globe with an upset stomach Phil Han CNBC still watching perfect click here to watch another great video from CNBC international oh and don’t forget to subscribe thanks for watching

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